Would-be Dealer Seeking Advice

Rebelgal

And so the collecting bug has bitten me hard again. Along with it, I am contemplating becoming a dealer; nothing huge, but smaller and specialized in MS63 and better graded Morgan dollars, and a niche within that, if things work out. My initial thoughts are to focus on shows where I can meet people and hopefully form some relationships, and buy and sell coins. I'm presently in learning mode, acquiring relevant reading on Morgans, scouting other businesses online, preparing for my first major show to attend at Pittsburgh this year (as a collector), and buying coins! I've had my first experience submitting to PCGS. I'm looking for feedback, plus/minus, comments and serious suggestions. Thanks in advance! ~Keri

OAKSTAR

I'm not a dealer, so what do I know. If you have a passion for anything in life, I would say go for it! It's always good to start at the beginning. Just the fact that you're asking the question here, tells me you're headed in the right direction!

You will probably be overwhelmed with the feedback you get here. Just take one step at a time.

Good luck and keep us posted.

jmlanzaf

What's your source of material?

If you're selling a small number of 64+ dollars, you'll cost yourself a fortune by becoming a dealer. Bid/ask spreads won't generally make it worthwhile to incur the costs of selling retail. You'd be better off flipping wholesale if you have access to a buyer.

If you haven't built relationships already, as it sounds from your post, you'll lose money dealing. The pretty shiny gold and silver make the display look valuable, but coin margins are very narrow and you need to know what you are doing to make any money.

WCC

I don't know how practical it is, but I'd advise you to try working for a dealer first. That's my advice for anyone contemplating starting a business in an industry they don't know.

Learn on someone else's dime not yours, even if working for free temporarily.

DNADave

I’ll be at the PAN show this year, buying. Take a look at all of the materials you’ll need to set up at a show. Pick up a table contract.
Tablecloths (sometimes they have to be a certain color)
Lights
Extension cords
Cases
Secure storage
Dolly
Cash drawer
Bowl of candy.
Etc.

Notice how many chairs they have in front of their tables and if people camp out in conversation, blocking potential buyers. Notice how attentive dealers are or are not towards buyers. Definitely a good idea to help at a show if you can first, or split a table with someone.

You need to be comfortable with it and not distracted.

Rebelgal

@DNADave said:
I’ll be at the PAN show this year, buying. Take a look at all of the materials you’ll need to set up at a show. Pick up a table contract.
Tablecloths (sometimes they have to be a certain color)
Lights
Extension cords
Cases
Secure storage
Dolly
Cash drawer
Bowl of candy.
Etc.

Notice how many chairs they have in front of their tables and if people camp out in conversation, blocking potential buyers. Notice how attentive dealers are or are not towards buyers. Definitely a good idea to help at a show if you can first, or split a table with someone.

You need to be comfortable with it and not distracted.

Thanks Dave... I do have some experience with this, as in a past life I was a sports card dealer in the 80's before the card companies screwed everything up lol... so tables, cabinets, etc... greeting customers, etc... I think I can hold my own there. But i will take stock of set-ups in Pitt this year!

Rebelgal

@jmlanzaf said:

If you haven't built relationships already, as it sounds from your post, you'll lose money dealing. The pretty shiny gold and silver make the display look valuable, but coin margins are very narrow and you need to know what you are doing to make any money.

That's why I'm here! Thank you!

jmlanzaf

@Rebelgal said:

@DNADave said:
I’ll be at the PAN show this year, buying. Take a look at all of the materials you’ll need to set up at a show. Pick up a table contract.
Tablecloths (sometimes they have to be a certain color)
Lights
Extension cords
Cases
Secure storage
Dolly
Cash drawer
Bowl of candy.
Etc.

Notice how many chairs they have in front of their tables and if people camp out in conversation, blocking potential buyers. Notice how attentive dealers are or are not towards buyers. Definitely a good idea to help at a show if you can first, or split a table with someone.

You need to be comfortable with it and not distracted.

Thanks Dave... I do have some experience with this, as in a past life I was a sports card dealer in the 80's before the card companies screwed everything up lol... so tables, cabinets, etc... greeting customers, etc... I think I can hold my own there. But i will take stock of set-ups in Pitt this year!

Margins on sports cards are much higher than 64 silver dollars.

ricko

@Rebelgal ... Welcome aboard. Good luck in your venture. From your posts, it appears you are heading in a good direction. Going to shows, scouting set ups, pricing, meeting other dealers, perhaps even helping at shows.... All contribute to your knowledge base, and from what I have learned here, it is critical to being a coin dealer. Good luck, Cheers, RickO

skier07

Being a coin dealer is like any other business. Buy cheap and sell higher. Unless you have good buying connections it’s going to be difficult making money. Good luck.

ctf_error_coins

Find your niche.

Learn high end coin photography.

VTchaser

I've tried to volunteer at my LCS since the guys know me pretty well. No dice. Can't say that i blame them lol

1madman

What I’m inferring from your post is you have minimal experience with all aspects of the coin market, and you’re going to attempt making money in that market. I think you’re gonna need a fairly sizable pile of cash to burn through for inventory and expenses. I also think you’re initially going to lose a substantial amount of money due to the learning curve of the coin market.

The most important tool is learning how to grade coins yourself, and learning the differences in how NGC and PCGS grade coins. It will take years to figure things out, and you’re gonna have to be able to roll with the ups & downs of the market.

Toughest thing for me personally at the moment is finding inventory.

Cougar1978

Get a display case, pay bourse fee for a show. Setup 123 go.

It takes serious money investment be a dealer. Goal good sales gross margin clearing show costs. Just buying coins not enough - you need get them low enough (buying right) make positive show net income. Sharing a table with a friend helps on first show.

Buyers will try low ball you, dealers seeing your a newbie will try buy at bluesheet. Boorish / broke Tire kickers will feed you their BS. You don’t owe any of them nothin except the coin they paid you for or money for the coin you purchased from them. Keep a professional attitude and practice good security. Cultivate your big spending customers. Enjoy the free show food and coffee for dealers. Try have something the big gun rich dealers on narrow spread don’t have. Work your angle.

Catbert

And as cougar will tell you, relieve stress by attending your local strip club. Remember to avoid the statue of liberty pass and keep it simple by running up the middle with your RB. Tell the tire kickers to buy or get away from your table since they can pay your price or take a walk. And beware, coins can often turn in the holder. Lastly, post often here and edit your posts every time so that there is no misunderstanding.

jdimmick

Lot of good input here. specializing in one specific area like common date ms63/4 morgans will be tuff, margins are tight if you pay fair and sell fair. too much competition in same arena. Learn to grade, and evaluate coins raw, might pick up better bargains, holder yourself, then sell. if not that, will need a good source to buy from consistently.

I agree with table layout and chairs, I only do a couple of local shows yearly, but I have learned the guys love to hang out around my table blocking potential business of buyers, and more importantly sellers, took the chairs away from my spot and helped greatly. These are the same guys that hang out around the shop all day, but there, I can keep them in the common area, and use my private office to conduct specialized business, appraisals, etc. harder at show.

Know your material, as others have said, many experienced dealers will pluck you like a christmas turkey, if your a newbie, and at the same time off load unsaleable junk , stale non-moving inventory that might seem like a good deal according to the price guide, but really isnt.

Cougar1978

Hey Rip - Lots of stalker quote trolls here huh? Kittie Liter box spill? What say ye?

Anything walk into the shop behind sheet? Time to flip man. Got cash.

ProofCollection

Are you planning to be online or only physical? You can start online-only first and probably build from there. Add up your show and travel fees and see if it makes sense. My wife used to have a business and had a trade show booth and I finally made her sit down and do the math and we determined she didn't make enough to cover the booth so we stopped going. Make sure you figure out how many coins you need to sell to break even on a show.

Cougar1978

Yes it’s a bummer if gross margin does not cover table fees and other show expense. However one big spender can make it a decent show.

daltex

@Rebelgal If you have experience as a sports card dealer, it will go a long way towards your education. Of course the businesses have changed a lot in the past forty years, but you're probably further along than you think you are.

I mean tire kickers, low ball offers, and dealers trying to cherrypick aren't exactly new, or restricted to coins.

logger7

The best dealers I have known are semi-retired from major businesses who enjoy the hobby and don't depend on making money in numismatics to pay their bills. I'd recommend it as a sideline, do a thorough search of online transactions, Heritage Auction, ebay, Great Collections and dealer online stores. On dollars with the long grading wait times, strict standards and tight buy/sell spreads it is hard to succeed at a profit in that area without ripping people off.

Rebelgal

You need to be comfortable with it and not distracted.

@ProofCollection said:
Are you planning to be online or only physical?

If I were to do this, I would by necessity be online as well. That being said, I would love to do more in-person to cultivate relationships!